Washington, D.C. — As the Surface Transportation Board evaluates the proposed $72 billion Union Pacific-Norfolk Southern railway merger, the American Economic Liberties Project today released a new report, “The New Railroad Barons: Why the Union Pacific/Norfolk Southern Railroad Merger Must Be Blocked,” outlining the stakes of the deal for public safety, workers, shippers, consumers, and the broader economy.

“A combined Union Pacific-Norfolk Southern will have disastrous consequences: less safe workers and communities, less competition, higher costs, and service disruptions,” said Erik Peinert, Senior Fellow at the American Economic Liberties Project. “For good reason, there has never been an attempt at a consolidated transcontinental railroad system until now — a scale of railroad consolidation not even met by the railroad barons of the Gilded Age. It’s no wonder the railroads are potentially trying to bypass the legal process through private meetings with the president regarding national guard deployments.”

“Even before this deal was officially filed, President Trump’s illegal firing of an STB commissioner who questioned rail consolidation — and the railroad’s substantial lobbying efforts — raises serious concerns about political interference,” added Ashley Nowicki, Policy Analyst at the American Economic Liberties Project. “The last forty years of railroad consolidation clearly demonstrate how this merger could threaten public safety and harm shippers, workers, consumers, and the broader economy. That’s why the CEOs of major chemical corporations, shippers associations, senators from both parties, and labor unions have opposed the deal. The Surface Transportation Board must show it can operate independently and protect the public interest over Wall Street.”

Following a wave of mergers in the 1980s and 1990s and Congress’s deregulation, the long-distance railroad industry has essentially settled into a pair of regional duopolies: Union Pacific and Berkshire Hathaway-owned Burlington Northern Santa Fe (BNSF) west of the Mississippi River, and Norfolk Southern and CSX Transportation in the eastern states. This modicum of competition, while insufficient, remains important for cross-country shipping. A shipper moving goods from an east coast port to the west coast can negotiate a competitive fair between Norfolk/CSX, and then again between Union Pacific and BNSF. However, if Union Pacific merged with Norfolk Southern, the combined system would be an unavoidable negotiating partner for any railroad shipper in the U.S., able to demand higher fees from shippers across the country. The merger would also diminish the leverage shippers have through the dispersal of intermodal facilities across the country, which allows them some control over where cargo from a truck or ship plugs into the rail network.

Beyond higher shipping costs — which get passed onto consumers — another likely outcome of the merger is operational meltdowns, service disruptions, and heightened safety risks. The wave of mergers in the 1990s created unprecedented backlogs and service interruptions, leading to many shippers diverting their traffic to non-rail providers at a significant expense. More recently, the Canadian Pacific/Kansas City Southern combination in 2023 has already resulted in the sort of extensive backups and delays the merging parties had promised to avoid. Union Pacific also has a particularly poor track record when it comes to safety for rail workers and ultimately the public, with aggressive cost-cutting and layoffs “far outpacing” any of their peers.

The brief also details the potential harms of the merger to workers and local communities. Historically, rail consolidation results in job loss, diminished labor power in negotiating better working conditions and pay, and understaffing that leads to burn out and increased safety risks for remaining workers and the public. Absent competition, railroads maximize financial extraction by scaling up while seeking to cut costs. This trend likely contributed to the 2023 East Palestine train derailment, where a nearly two-mile-long Norfolk Southern train staffed with only three employees contaminated over a million gallons of drinking water with industrial waste.

Finally, the brief outlines the regulatory process and merger rules of the Surface Transportation Board, the federal agency with merger review authority over the railroad industry. An appendix outlines the STB’s regulatory process and review timeline for the deal.

Read the full report, “The New Railroad Barons: Why the Union Pacific/Norfolk Southern Railroad Merger Must Be Blocked,” here.

Learn more about Economic Liberties here.

###

The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.